Why Avoid Bankruptcy

Bankruptcy is not a solution for every person in trouble with debt to turn to. Bankruptcy has far reaching and long term consequences that can affect an individual's life. With proper help you can lower your monthly payments, reduce interest rates, waive late fees, eliminate collection calls, avoid bankruptcy, have only one monthly payment and become debt free.

There are many different types of bankruptcy. But the most popular forms of bankruptcy are Chapter 7 and Chapter 13. There are some huge disadvantages in filing for bankruptcy. Your credit could get ruined. Bankruptcy can show on your record for 10 years from the date it was discharged. It reduces the chances of getting loans and jobs in the future as creditors and employers judge a candidate first hand through their credit report.

Declaring bankruptcy can also result in losing valuable assets. If you are a business owner, filing for bankruptcy can halt your business from growing. The damaged credit rating due to bankruptcy will not help you qualify for business loans.

You also affect the closing of any financial accounts. Your bank accounts, credit cards etc to be closed. Anything that you might be leasing, or buying on hire purchase, such as your car will be immediately returned to the owner. It can get extremely difficult to buy or even rent a home, get insurance, as well as buying or leasing a car.

If all of these things happen to people who declare bankruptcy, why do people file for bankruptcy?

There are many emergency factors that may force people to take this alternative approach. For example, unemployment or sudden loss of job plays a major role. Divorce is another factor. This is because in most cases one or both the parties suffer financially due to legal separation, and of course credit card usage.